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IT is the cause of rising income and wealth inequality since the 1970s [pdf] (economistsview.typepad.com)
160 points by o_nate on Aug 7, 2017 | hide | past | favorite | 190 comments



I really thought it was corrupt politicians giving away public resources to private mega corporations, irresponsible financing systems, wall street selling lel bonds, the undermining of the national working class, bogus copyright laws that are designed to squish small and upcoming competition, and people purchasing garbage degrees instead of useful ones with money they don't have guaranteeing they'll be indebted for at least two or three decades.

But no, it's just IT. How wrong I was.


There does seem to be a hostility towards people who work in tech on the left. To me this feels like pandering to that by Clintonian types who don't actually have any interest in dealing with class issues.


From what I've seen, I don't believe it's universal. The hostility is toward certain kinds of people who encourage and enable centralization or crystallization of power. People like Richard Stallman are generally liked, but people like Peter Thiel or Mark Zuckerberg are not. Mind you I don't know what the Tankie side of things really says because I loathe them.


It's definitely not universal. But in my opinion, it's more like there are people who think they're better than us that are upset that we're as successful as we are. And being predominantly white men doesn't help, even if we do tend to lean left. That shitty documentary Nancy Pelosi's daughter made is probably a good example of that. The premise is basically that tech workers are terrible and are destroying San Francisco. I'm sure there's similar sentiments on the right as well, but theirs seem to be more of "these rich tech liberals want to tell us how to live" or something along those lines.


Do software engineers predominantly lean left? I think the left / right debate is quite outdated, with both sides having equally good (but also bad) ideas about certain subjects.

Why can't you lean left on healthcare and LGBT rights, yet more right on certain economic policies and tax issues?


I think both are true. Software engineers tend to vote Democrat, but they're also much more likely to be libertarians than the average person. Or even "alt-right" to be honest. Outside of a general leftward bias, I think we seem to be more prone to exploring ideological extremes.


It depends more on the industry. Software Engineers for Google and Facebook are probably more left leaning. Software engineers for a defense contractor are probably more right leaning.


Alt-right is white nationalism. So you've gone from libertarian which is not really left or right (depends on issue but revolves mainly around a weak central government except as it relates to protecting civil liberties and national defense), completely skipped moderate conservatives, conservatives, and right wing, and even hard right, and landed on a blatantly racist movement that has no f'n idea how the economy even works which is why they keep thinking tax cuts for people who make over $10 million a year creates jobs, but bank deregulation is good, but the banks f'd them over in 20008, but for sure stop importing brown people, legal and illegal, and especially if they're Muslim.

Most alt-right are just deeply ignorant people. But some are malevolent. The base ideology requires people believe vicious things about "the other" who happen to be merely different. They refer to liberals as libtards, and prefer strong leaders like Putin, Kim, Duerte, Erdogan, and even weaker autocrats, as compared to "vile libtards" like say Clinton (who is something like a cross between Woodrow Wilson and Margaret Thatcher). No doubt they'd prefer Putin as president of the United States than a Clinton.


I skipped those other things because there's actually less of your typical conservatives in this industry than average, but there's a disturbingly high number of alt-right software engineers. Like 10% of the last company I worked for!

Plus, people have been referring to liberals as libtards since way before the alt right was a thing, and the alt right doesn't really tend to advocate for tax cuts for the rich. They are overwhelmingly racist and white nationalist but not exclusively. And really the root of the ideology is fear of what could happen to whites as a minority group, which is very paranoid and not something I'm personally concerned about, but it's not the same thing as hate. A lot of these people are also mentally ill. The "basket of deplorables" approach to dealing with them clearly did not work. We can be against everything they stand for and still be aware that they're human beings that on the whole are probably more confused than sociopathic or evil.


I follow. And I agree there is a distinction to be made even in the alt-right between the ignorant and violent, even if both come with dangerous consequences.

In another conversation on HN about the social benefits of shaming people, I'd say a possible reason "basket of deplorables" approach didn't work is because it was quickly followed by milquetoast apology. If you want an invidious recipe for political fallout, that would be it. If you're going to try and shame people effectively as a bully you have to stick with it (see Trump).


"The base ideology requires people believe vicious things about 'the other' who happen to be merely different."

The "alt-right" are not the only ones who are guilty of this, unfortunately. This is a characteristic of the extremes of pretty much every political position or ideology.

Personally, the whole "if you're not with us you're against us" mentality of both of the mainstream political parties is what drove me to vote Libertarian last election. Johnson's campaign seemed a lot more focused on welcoming folks with differing political views (which is unsurprising, given the rather long range of libertarianism from libertarian socialism to anarcho-capitalism, and given the fact that the Libertarian Party is in no position to be alienating voters), which was very refreshing amid both Clinton and Trump basing their campaigns on how bad the other candidate is (and further on how bad the other candidate's supporters are).


The American political system punishes general election voters for not compromising on one of the two major parties. It lacks runoff elections, as well as range or preferential voting strategies so that voters are not so harshly punished by deviating from consensus candidates.

The ensuing dissonance upon understanding this punishment is what encourages our low voter participation rates, as well as hyper-partisan politics, tribalism. In addition, there's a pervasive "government sucks" that contemplating a state by state change in voting law, and it would have to be state by state, seems like dark comedy. It would take a lot of political committment way beyond that of voting 3rd party to fix the problem we have in the American political system. Americans are politically lazy, content to not vote, or vote 3rd party, and suffer the inevitable result, engage in political denialism, than the critical thinking required to fix it.

The effect of closed primary elections also enhances this tribalism and discourse problem. It's maybe 8-12% of the total eligible electorate that get a presidential primary candidate the nomination for the two major parties.

Both major political parties sabotaged the Electoral College by stacking it with party loyalists rather than, you know, smart people or even contemplative people or even randomly selected citizens. We could hardly do worse choosing dead people for Electors.

A case to watch is Gill vs Whitford before the Supreme Court next year.


Recently run into this in uni. God save me from the highly educated minority who are always right and love to argue (with tenure). Basic fact: You don't know anything except what you are told by what I design.


Maybe, but be careful here though.

It's possible for both the parent post and the article to be on the right track. Wealth enables action and technology obviously enables and creates wealth.

It's also difficult to assign this to "Clintonian types" when in general the centrist side of the Democrats has been such an ardent supporter of the growth of the tech industry. They're eager to own the eneconic growth.


From what I've seen, they have been more than capable to support the industry and take credit for it's successes and simultaneously demonize tech workers as unempathetic racists, sexists, and gentrifiers. A specific examples being Alexandra Pelosi's documentary San Francisco 2.0. Bill Maher has also made similar anti "tech bro" statements from time to time. While he's not the perfect centrist, he was pretty much behind the Obama administration 100%, and I would definitely consider him to be part of the Democratic establishment.


> they have been more than capable to support the industry and take credit for it's successes

Well let's face it, we're all getting a huge break from the government right now in a ton of different ways, so they do get some credit for making the laws incredibly lax around here.

Even Trump's government gets credit until it screws up this sweet deal we're on. And if you wanna see how sweet it really gets, go into fintech. All your opponents with lots of cash on hand are basically operating blindfolded with both hands tied behind their back.

Regulators literally have no idea what to make of us in that space. They largely leave us alone so long as you have even semi-competent legal advice. If you have good legal advice? Well you end up recreating financial institutions in all but name and without any regulation (e.g., Digit).

> simultaneously demonize tech workers as unempathetic racists, sexists, and gentrifiers

I wanna get to the rest of your post, but I just can't leave this alone. I'm sorry to shift the focus here, but we really don't need any external help on this though, do we?

The racist part of the story has legs because folks like the "unnamed" google engineer writing screeds about how no, actually, it's the rich conservatives in the majority who are unsafe. Because tech conferences argue they're a safe space for men who's primary ideological focus for their publications is proving black people thrive under slavery. Because a constant dribble of stories like Kixeye exist to support population statistics that are... statistically unlikely by pure chance..

The sexist part of the story? Gosh maybe if our industry stopped doing so many things that enable abuse of women, the narrative might not be that we enable the abuse of women. Similarly, if we paid women more or less equally within rank and gave them equal opportunity in the workforce... This problem might exist to a much lesser degree. Uber's ripping itself apart not because some women choose to speak out; it's because the public is discovering obviously unethical and probably illegal behavior.

Tech gets special attention, I grant. It's outsized, growing fast, and is consuming and reformatting other INDUSTRIES as its primary fuel source rather than more traditional business models.

> I would definitely consider him to be part of the Democratic establishment.

This is an excellent example of a perception gap. See, I've always seen him as fringe because of his views on transgenderism, his decision that racial slurs are free speech he should exercise, etc.

Unlike, say, Clinton or Obama who've obviously changed their opinions on this subject (or decided to portray an image largely indistinguishable from someone having changed their image) Maher has continue to expand upon it. Maybe he was center-left when he started, but it's difficult to say he's on the left side of the cultural equation these days.


But that guy at Google is very much in the minority, as are all of the people causing problems with various *isms. But that doesn't stop people from continuing to paint us specifically with too broad a brush, and I don't think that's just an accident, I think it's because they have an issue with us personally, and that's probably due to negative stereotypes about "geeks".


> But that guy at Google is very much in the minority, as are all of the people causing problems with various -isms.

Can you prove this? I'm curious. I don't entirely disagree, but I sure would love verification.

I think that whole thing about "unconscious bias" is very real, and it's quite fair to rigorously examine our biases and accept constructive criticism of them. There's also a matter of perception lagging behind reality, and reality being difficult to assess because of availability biases.

> But that doesn't stop people from continuing to paint us specifically with too broad a brush,

Deep apologies for going so far on a tangent here, but I'd like to encourage you to step back from these for a moment.

Firstly, don't be that person and allegations aimed at said people don't really apply to you? If you accidentally behave in a way that lines up with these allegations, then own it, accept the censure, identify what steps you'll take to correct yourself then execute on them.

> I think it's because they have an issue with us personally, and that's probably due to negative stereotypes about "geeks".

I'm sure that there is a bit of this still lingering in the world, but by-and-large the stereotyping about "geeks" has ended. Geeks rule the damn world. Geeks dominate the news cycle. In terms of combating anti-intellectualism? We're winning that handily.

Here's the part where I sorta agree with your previous statement, even if I wouldn't bet the whole farm on it:

One of the reasons that the extreme-conservative-and-extreme-liberal rhetoric is amplifying so much lately is that fact-and-experiment-driven flexibility is actually gaining so much cultural mindshare from more dogmatic methods of thinking. This empirical method is decried by both sides of the aisle as "centrism" or painted as anti-humanist. I don't believe it is, but such is the defense mechanism of those those thoughts. Examine the rhetoric of a "nationalist" or a "monarchist" or even a "communist"; exclusion is baked into their doctrine. It's why these ideas are so tenacious.

As these more dogmatic groups get backed further and further into corners, they seem outsized cultural impact more and more desperately to avoid the perception that they are in decline.

To this end, enduring slings and arrows while focusing on doing the right and fair thing, with an eye towards incremental improvement, is exactly what folks attacking our community hate us doing. Part of the reason they're eager to amplify our failures at self-policing is because they're flustered by the fact that for the most part the valley has calmly agreed that the current situation is in fact illegal and untenable and started taking steps to correct it.

These steps can't happen overnight, nor can they be "one simple thing." We both know that. But dogmatic thought thrives on the notion that if you just listen and do whatever they say (often without any pre-planning at all) then it'll all go away.

Looping this all back around to the topic, it's up to us to figure out how to use the power-disparity we're developing (and that's precisely what a difference is technology is) to make the world a better place. Criticism needs to be in our lives to remind us that we're shaping things that can affect generations and generations to come.


I think there's hostility to the rich in general on the left. Not all people who work in tech are rich, but many of the, oh, top 10% of income earners, especially those someone else might come into contact with regularly, are in tech. And human nature to express more ire towards those you come into contact with regularly than those you never do.


I think that's partially true, but I also think it's because of negative stereotypes of people in tech being "nerds" who are to be looked down upon. It's more of a mismatch between what they think our social and economic class ought to be and what it actually is.


I dunno, there are a lot of nerdy leftists.


Yes. I work in IT and I'm rich, aren't you rich like the rest on engineers that read Hacker News? Not like the poor people at finance institutions, they create so much value and get so few in return...


They're also enabled by IT.


Financial institutions are all now IT companies. It's an essential core competency. Money is information.


A core competency doesn't mean they are IT companies. Knowing how to use a computer is akin to literacy. That does not mean that being so efficient in Excel will make you Martin Shkreli (https://www.reddit.com/r/videos/comments/4df5il/martin_shkre...) Finance is much more than knowing how to use or even excel at any software or programming. Computer is an enabler in this case IMHO.


They're IT companies that just don't sell any of their tech. But then Facebook don't sell their tech either. Just as a computer is an enabler at Facebook to manage personal contacts and communications, at Google to manage their indexing and advertising business, at Amazon to manage their ordering and inventory systems. Banks nowadays are just as much IT companies as any of these. A typical bank employs thousands of developers. They even develop their own development and service deployment environments, their own IDEs, even their own custom languages, middleware, development frameworks and libraries and database technologies.

Some have even rolled their own internal cloud infrastructure services like mini-Azures or a mini-AWS and systems like Hadoop but using entirely custom tech, not just an instance of an open source solution. There is almost nothing going on in the big tech giants in terms of core technology development that some banks somewhere aren't also doing.

You might split hairs or come up with some technical definition to avoid classifying them in this way, but if you do you will be deluding yourself. The Banks have found that in many areas they cannot rely on external technology companies to meet their needs, so they have to meet them using internal resources and roll a lot of their own tech.


And that is precisely why (imo) the finance world engineered the outsourcing strategy (and invested heavily in off shore body shops) in late 90s. At least that is how it looked to me in those days.

(The official story was that low skill IT jobs are sent off shore to help the bottom line. This, the official reason for a service and information economy to tech transfer its crown jewels, never made any sense. Consider that software craft is mostly learned on the job, thus gutting the entry level insures future deficits in higher levels. And further that by near universal account, outsourced software projects are technically subpar and subject to multiple rewrites. All this while entire floors at investment banks' IT departments were 'let go'.

You do the math.)


That. Let's all just dismiss that governments worldwide have been growing out of control since the 30's so we can settle on an enemy and keep the growing.


I've always viewed IT as the new version of the middle/upper class. It's kind of weird to criticize a field that's open to people joining and paying well as the reason for wealth inequality.


Common media narratives like the ones you describe are usually wrong or at least they give misguided view of relative importance of different factors.


"Common media narratives" ... or ... "easily observed phenomena"?

You be the judge!


Here's another possibility: The highly increased value of intellectual property that comes from IT has made transfer pricing a much more efficient means of tax avoidance for companies, who are free to move almost all their profits to the Cayman Islands and other tax havens. Expecting our tax authorities to judge whether a trade between two subsidiaries of a multinational is at 'fair market value' makes sense if they're trading steel bars, not so much if they're trading e.g. a 'license for the Google search algorithm'. Intellectual property, pretty much by definition, is unique rather than a commodity.


The authors of the paper identify a trend of "growth that began in the 1970's", and say that correlates with the emergence of IT firms being able to erect barriers to competition. It might be coincidence, but the late 1970s is also when:

1. The US Copyright Act of 1976 extended copyright from a fixed term of 28 years (with opt-in 28 year extension) to the life of the author plus 70 years.

2. The Patent Cooperation Treaty became active in 1978, making it much easier to obtain patents in multiple countries.

It would seem that IP was strengthened (both as a method of avoiding tax and suppressing competition) in the late 1970s. The deregulation of the banking industry which happened in the early 1980s seems like it would have helped also.


I'm just going to throw this out there as well, but 1973 was when the Great Stagnation began (http://macromarketmusings.blogspot.com/2011/02/great-stagnat...), and it coincides quite closely to when Richard Nixon ended the Bretton Woods system and allows the value of the American dollar to float relative to other currencies.

In other words, globalization is a huge factor that the authors of the paper don't seem to be accounting for.

In fact, after Ctrl+F'ing "foreign", I get:

>By December 2015 holdings of liquid assets by foreign subsidiaries rose to $2.4 Trillion (see Whalen and McCoy (2016)) while domestic holdings of liquid assets rose since 2008 by about $1.9 Trillion. These foreign assets increased due to a legal provision that allows Indefinitely Reinvested Foreign Earnings to be free of US income tax. Hence, $2.4 Trillion are kept abroad not out of productive needs but rather as a device to save income tax hence not necessary for productive capacity

...so maybe American companies are using IT to store wealth abroad, but maybe American companies are being taken over by foreign entities? That would explain how our trade deficit has persisted for several decades.


I'd like to see corporation tax replaced with a Border Adjustment Tax [1]. The tax would be paid on the result of USA Revenue - USA Costs. If you were to move intellectual property offshore and licence it from that subsidiary then that would not be a USA Cost and therefore would not be deductible. If you brought it back onshore then it would only be deductible if there was a cost. If you moved into another company within the US, then it would be a cost but that company would then need to pay tax on that revenue minus the minimal costs that it would incur to store IP.

1. http://www.investopedia.com/terms/b/border-adjustment-tax.as...


Okay sounds good in this case but what if a company really needs to buy a licence from an offshore company, let's say a critical technical part in your manufacturing process. Then you can't deduct it but in reality these are your costs.

Remember that the problem is caused by companies abusing the system but the rules are there because honest companies need to operate.

The real solution would fix the issue while allowing honest companies to work just like they did before. The problem is that software companies are composed almost purely out of intellectual property, that is intangible and hard to really track.


> Then you can't deduct it but in reality these are your costs.

The tax wasn't collected to begin with. The reason you can deduct it when buying from a local company is that they paid it. If you buy from a foreign company that hasn't paid it then you have to because they didn't. It isn't an unfairness, it's the reinstitution of fairness.


Then they would need to raise your prices to afford the tax, or select a more expensive locally made alternative.


Hadn't heard of that before. Personally, I'm rooting for https://en.wikipedia.org/wiki/Formulary_apportionment


Anything like that which results in a huge financial incentive for outsourcing is not going to be popular.


Tax avoidance might be a factor sure, but can it be enough on it's own? If IT wasn't increasing the value of intellectual property, taxing it would be an economy-distorting issue. So I see the tax issue as being the cherry on the top, but not the core issue.

Tax manipulation doesn't change the fundamental value of labour, but IT does. It enables vastly more value to be created using less and less labour and materials, sometimes by many orders of magnitude. That's the game changing trend.


// Automation replaces men. This of course is nothing new. What is new is that now, unlike most earlier periods, the displaced men have nowhere to go. The farmers displaced by mechanization of the farms in the 20's could go to the cities and man the assembly lines. As for the work animals like the mule, they could just stop growing them. But automation displaces people, and you don't just stop growing people even when they have been made expendable by the system. Under Stalin the kulaks and all those who didn't go along with the collectivization of agriculture were just killed off. Even then, if they had been ready to go along, Stalin could have used them. But in the United States, with automation coming in when industry has already reached the point that it can supply consumer demand, the question of what to do with the surplus people who are the expendables of automation becomes more and more critical every day....

...As automation spreads, it will intensify the crises of capitalism and sharpen the conflicts among the various sections of the population, particularly between those working and those not working, those paying taxes and those not paying taxes. Out of this conflict will grow a counter-revolutionary movement made up of those from all social layers who resent the continued cost to them of maintaining these expendables but who are determined to maintain the system that creates and multiplies the number of expendables. This in turn will mobilize those who begin by recognizing the right of these displaced persons to live, and from there are forced to struggle for a society in which there are no displaced persons. //

James Boggs, _The American Revolution: Pages From a Negro Worker's Notebook_, 1962(!!)

http://www.historyisaweapon.com/defcon1/amreboggs.html


Another argument for basic income? The displacement of any worker who drives for a living as at our doorstep.


I think that sort of depends on your perspective. Some critics of UBI would say it's basically a scheme to keep a capitalist system and a ruling class in place that we'd be better off doing away with.


This is literally the first time I've seen someone call UB I a capitalist scheme, as the absolute most of these capitalists would call UBI a socialistic measure.


I know it sounds odd, but the idea is that while it is a socialist program, it actually helps maintain a capitalist system by preventing that systems failures from leading to it's demise. A UBI paid for with a tax system similar to our current one wouldn't really harm the ultra rich much, it would be paid for by the middle class and wealthier people who still work for a living, rather than just sitting on a giant mountain of cash and collecting interest.

Edit: plus, if everyone views it as socialism, and then they eventually get it 20 years from now, maybe that will keep them from pursuing the real thing. Although I'm getting to be a bit of a paranoid conspiracy theorist with that line of reasoning.


Or severely limiting automation a la the Dune universe.


Yeah, I think that's actually the _main_ argument for UBI that's getting tech sector people and YCombinator interested in it.


> Another argument for basic income?

Another argument why some sections of the population should not have kids.


>> The farmers displaced by mechanization of the farms in the 20's could go to the cities and man the assembly lines.

Things like this are not necessarily true; some displaced farmers moved into cities, but many did not and have been toiling away since then.

We really whitewash history


If they were still making a living farming, they were not 'displaced by mechanization', of course. But there's obviously been a huge urbanization wave in many/most parts of the world over the past 100 years.


They said that farmers "could go" not that all did.


The Luddites have been saying that for years, though the exact nature of the displacement from which there is no place to go is different.


> The low labor share in the 1980's is then out of line with the rest of our results. However, it is compatible with the fact that wage growth and labor share started to fall early in the 1970's, caused by factors not present in our study. Political factors such as laws to weaken unions, automation, outsourcing, and globalization were operative even before the rise of monopoly power in the 1980's. Hence, by the time monopoly power came into play, wages and labor share were already low. Hence, apart from rising monopoly power, other factors had an impact on the dynamics of wages and labor share which are not examined here.

Indeed when we compare the inequality present in different industrialized nations with varying degrees of unionization, nations with stronger unions seem to have lower inequality despite experiencing an increase in automation. As stated in an IMF report [1]:

Traditional explanations for the rise of inequality in advanced economies are skill-biased technological change and globalization, which have increased the relative demand for skilled workers, benefiting top earners relative to average earners. But technology and globalization foster economic growth, and there is little policymakers can or are willing to do to reverse these trends. Moreover, while high-income countries have been similarly affected by technological change and globalization, inequality in these economies has risen at different speeds and magnitudes.

So perhaps the combination of automation together with weakened unions is responsible for inequality in industrialized nations?

[1] https://www.imf.org/external/pubs/ft/fandd/2015/03/pdf/jaumo...


IT codes knowledge and techniques into machines and by that makes workers with low and medium skill levels more exchangeable reducing their negotiation power vs. the capital providers. Over time this leads to salaries lagging for this part of the working population. Unions may slow this process but their negotiation power is slowly eroding too. These days it is not unheard of that whole factories are shifting across borders.


It isn't the technology that's to blame for how the wealth it creates is distributed. That's just silly. And honestly, an efficient socialist economy is made much more realistic by modern technology. There's a lot that can be done to offset some of the downsides that have been associated with it in the past.


> an efficient socialist economy is made much more realistic by modern technology

No, it isn't, because no amount of technology will solve the fundamental information problem with centralized control, which is what any socialist economy must depend on. Nor can technology fix the fundamental incentive problem with socialist government, which is that decisions affecting everyone are made by people with the least amount of stake in their outcomes.


The information problem is exactly what I'm referring to. We have a lot of means of gathering and analzying information that we didn't have before, and those could be used to accomplish this. I'm also not advocating for a fully planned economy either, that has a lot of problems including the ones you mentioned.


> The information problem is exactly what I'm referring to

I'm not sure you understand the information problem I meant. The information problem I meant is that, heuristically speaking, the amount of information required to make correct economic decisions goes up exponentially with the size of the economy, while the bandwidth of information channels available to any central authority only goes up linearly with the size of the economy. So there is no possible way that any central authority can receive enough information to make correct economic decisions in an economy of any significant size.


How is it then, that we're seeing so much centralization in the industry? A typical megacorporation is just as centralized as a socialist government, and they probably do just as much forecasting and planning, and they apparently succeed (most of the time).


> How is it then, that we're seeing so much centralization in the industry?

First, because the goal of corporations is to maximize profits, not to maximize people's well being. The point of socialist government (and more generally of "correct" economic decisions) is supposed to be to maximize people's well being. For example, Google is a large corporation because of economies of scale in leveraging search and other apps to capture ad revenue. It makes no profit from serving its users' needs, except indirectly. Similar remarks apply to Facebook and other tech giants.

Second, because centralization in industry is actually dependent, to a large extent, on centralization in government. Large corporations have all kinds of advantages that have nothing to do with serving customers well, and a lot to do with being able to successfully lobby lawmakers and regulators to their advantage. The tech industry is young enough that this process hasn't gone as far as it has in, for example, the US defense industry, where all of the large corporations exist only because they have optimized themselves for getting government contracts.

In other words, large corporations don't have any magical way of getting around the information problem I described, any more than large governments do. They just latch on to a source of profits that doesn't require them to actually aggregate all that information at all.


> We have a lot of means of gathering and analzying information that we didn't have before, and those could be used to accomplish this. I'm also not advocating for a fully planned economy either...

Accomplish what? If you don't mean accomplish central control over the economy, then I fail to understand what you mean by "an efficient socialist economy".


Parts of the economy can be controlled centrally, if it makes more sense, or other parts can be decentralized by a variety of different means, including worker co-ops. Even the centralized parts could still operate under a market system if needed, leaving them no worse off information wise than a large corporation. Socialism != Stalinist planned economy. The key part really is the elimination of a capitalist class which does not work and hoards and accumulates wealth that's being created by others. Collective ownership of that capital and "the means of production" is more of a benefit to society.


> the elimination of a capitalist class which does not work and hoards and accumulates wealth that's being created by others

"Collective ownership" doesn't solve this problem; it makes it worse.

The only way to solve it is for everybody to own the wealth they create, and then trade. In other words, free markets. "Capitalism" might not be the right name for such a system, but that's because that word has come to mean centralized control of capital, rather than free markets.


> Collective ownership of that capital and "the means of production"

There is no such thing. You've just reinvented the same kind of Communism that the Soviet Union ran a 70-year-plus experiment on. It doesn't work. Control of how capital is used always comes down to a small fraction of humans making the decisions.


We already essentially have a tiny bit of that in the form of the capital gains tax. Raise that a bit to fund public sector investment (but maybe not now because interest rates on borrowing are so low) and set a steep inheritance tax and you've gotten much closer. As for distribution of the money afterwards, doing everything at the federal level isn't desirable for a lot of things, so transfer that to state and local governments in those cases. Although a prerequisite to any of this being a good idea is making our democracy a lot more functional.


I don't think it's technology to blame exactly, but I think technology is a part of the story. I think decreasing areas for expanse created a crisis for capitalist profitability, which tech was one "solution" to, but it's a solution that makes increasing portions of the population surplus/unneeded labor, and increases wealth inequality.


Not the least of which is mass automation, which removes one of the worst aspects of socialism and communism; the permanent working underclass.

A friend of mine says Communism arrived 100 years too early, I'd say that's an excellent way to put it.


> mass automation, which removes one of the worst aspects of socialism and communism; the permanent working underclass

Mass automation doesn't remove the underclass; it just makes it a non-working underclass instead of a working underclass. That is not an improvement.

> A friend of mine says Communism arrived 100 years too early, I'd say that's an excellent way to put it.

Only if you think that Communism is potentially workable. It isn't. See my response to jrs95 upthread.


> Mass automation doesn't remove the underclass; it just makes it a non-working underclass instead of a working underclass. That is not an improvement.

How is that not an improvement? So we have a certain segment of the population that doesn't produce, when we have such a small portion of the population producing such wealth, does it really matter? This whole argument is based on the predication that everyone must "earn their keep" and in the days where the hunters would leave the village daily to kill food, that was true, but when 2 of the hunters in our village bring home enough daily to feed the entire village 10 times over, is it really relevant the contribution of the other 20 hunters? Or is it more beneficial to the village to have them doing other things that while not intrinsically valuable, could improve the lives of the other villagers, the 2 hunters included?

It's a little hyperbolic I admit, but I'd like to think that once we reach the point where less and less actual work is required that we'll branch out into other things, not simply let people who aren't working die off in the streets. Man was not made to toil daily for his meager wage and die.


You are basically limiting "produce" to mean produce basic subsistence items like food, clothing, and shelter. Yes, of course the fraction of people that need to work to produce those things will decrease with automation--that's been happening for most of human history, and has been happening a lot faster since the Industrial Revolution. In the US in the late 19th century, IIRC, something like 19 out of 20 people worked on farms. Now it's about 1 in 20.

But there are two things that can happen with the surplus capacity available. One is for people to, as you say, "branch out into other things"--produce things other than food, clothing, and shelter. There is a basically limitless demand for goods and services, and once one of them gets automated, people just find other things to demand that aren't automated yet. In other words, just as you say, you have people doing things that improve the lives of everyone.

The other thing that can happen with the surplus capacity available is that it gets wasted. People who find they don't need to work to make a living, do nothing that improves the lives of anyone, including their own. The best case of this is that they sit all day watching soap operas, or something like that. The worst case is that they start doing things that worsen the lives of everyone, like committing crimes.

The question is, which of the two possibilities above is the default outcome of mass automation, if mass automation actually does remove the need for the underclass to work at basic subsistence production? You seem to think it will be #1; but my money is on #2. If we want #1 to happen (and I certainly agree that #1 is vastly preferable to #2), we are going to have to give people an incentive to produce things that improve people's lives. I don't think most people will do it without such an incentive, and historically the only incentive we know works is the need to earn a living.


> You are basically limiting "produce" to mean produce basic subsistence items like food, clothing, and shelter.

I would also include the arts, entertainment, service work, craftsmanship, etc. But going on...

> Yes, of course the fraction of people that need to work to produce those things will decrease with automation--that's been happening for most of human history, and has been happening a lot faster since the Industrial Revolution. In the US in the late 19th century, IIRC, something like 19 out of 20 people worked on farms. Now it's about 1 in 20.

I feel like you're conflating labor specialization, which is what happened for most of human history where machine augmentations created more and more specific jobs (instead of "farmer" you had farm hands, farm maintenance technician, agricultural technician, etc.) all of which were new, different, and usually better jobs with more education and more pay.

Automation on the other hand eliminates jobs as it goes; instead of a new tractor that enables one worker to plow many fields, an automated tractor plows fields 24 hours a day, without breaks, food, or complaints. The guy who drove the tractor has been automated; he hasn't had his labor specialized, his labor no longer exists. So now he has to find a new job which is not nearly the same as training up for a job that he got specialized to.

As to this:

> The question is, which of the two possibilities above is the default outcome of mass automation...?

The default is certainly #2. My argument is that paying people to sit at home and watch soap operas is preferable to paying them to sit in jail cells. It's also often cheaper, and more humanitarian. But the first step to getting to that kind of place is decoupling work from life, because right now the idea that someone could live off of the excess production of our society is offensive to huge numbers of people, largely because of societal norms that we are in control of, and due to leftover Red Scare.


> I would also include the arts, entertainment, service work, craftsmanship, etc.

But that destroys your argument, because these things are not automated and won't be any time soon. Automation certainly does not remove the need for humans to create works of art and entertainment, to perform services, to provide craftsmanship, etc. So if all those things are included in "produce", then there are lots of ways for humans to produce that won't be displaced by automation any time soon.

> Automation on the other hand eliminates jobs as it goes

So does labor specialization, as you call it. Machine augmentation doesn't just create "more and more specific jobs"--it eliminates the old jobs that didn't require the knowledge of how to use the machines.

Also, even if a tractor isn't automated (it requires a human driver), it still enables one human to do work that it took many humans (about 20, with the present state of farm automation in the US) to do before. All those other jobs are indeed eliminated. Historically, farm laborers whose jobs disappeared went to the cities and started working in factories or learned a trade.

> My argument is that paying people to sit at home and watch soap operas is preferable to paying them to sit in jail cells.

Agreed, but my argument is that if those are the only two choices, we're doomed. Basically, you're saying society will, in the fairly near future, end up stagnant--all important jobs will be automated and all of the humans will just sit around watching soap operas (except, perhaps, for the small number of humans who oversee the automation). And I'm saying that such a society will collapse, because the rest of the universe is not stagnant. Things are always changing, and only humans--human thought and human ingenuity--can cope with change. (And if your answer is that we'll just invent AI and automate that too, that just means we'll be at the mercy of the AI, which I don't see as a good situation.)

> the idea that someone could live off of the excess production of our society is offensive to huge numbers of people

I would put this differently. I would say that the idea that someone could receive a basic living without producing anything that improves anyone's lives is offensive to huge numbers of people. And it should be.


What's offensive is, the thought that the only good in a life is working like a slave to please an intellectual's ideal.

Its the old Protestant work ethic, which served us for a time but is rapidly becoming obsolete.

In the 1950's we wrote about how robots would remove the yoke of labor from our shoulders, let us go on to be creating and enjoy leisure. Now that it's happening, folks are panicking. Cries of "But people must work; its offensive if they have leisure!" go up on every discussion site.

Try to think outside the box. What might people accomplish if they're not required to labor at McD's for 8 hours a day?


> What's offensive is, the thought that the only good in a life is working like a slave to please an intellectual's ideal.

Which is not at all what I said.

> What might people accomplish if they're not required to labor at McD's for 8 hours a day?

Lots of things, I'm sure. And as long as those things improve people's lives in some way, I'm all for it.


How about, leave that up to them to determine? Again, intellectual ideals work as long as we all think alike. Which we don't.


> How about, leave that up to them to determine?

Up to whom? Yes, you get to decide what improves your own life. But you don't get to decide what improves someone else's life.


> But that destroys your argument, because these things are not automated and won't be any time soon.

After the limited time I've spent in my life paying attention to this, I'm not assuming any job, including my own, is safe from automation.

> Historically, farm laborers whose jobs disappeared went to the cities and started working in factories or learned a trade.

And that is the difference, except this time the cities jobs are being automated and there's no where left to go, as even the farms don't need nearly so many people. And yes there's certainly an argument to be made for the trades which I'm sure are (mostly) safe from automation for awhile, but not forever, and there's a limited pool of people who are skilled enough to do those jobs, and even past that is a limited availability of those jobs, AND AFTER THAT is the fact that as more and more former factory workers, truck drivers, and coal miners all sign on to be plumbers, electricians, etc. all of which are needed that the supply of those workers will explode and the wage they make will therefore shrink.

> Agreed, but my argument is that if those are the only two choices, we're doomed. Basically, you're saying society will, in the fairly near future, end up stagnant--all important jobs will be automated and all of the humans will just sit around watching soap operas (except, perhaps, for the small number of humans who oversee the automation).

That't not at all what I said: I said we should have a system in place for that certain group of people who have nothing to contribute, because there's nothing wrong with that. The alternative to feeding and clothing them in their homes is to feed and clothe them in prison, and the former doesn't enrich private prisons and we don't need to pay for guards, not to mention the ethical cost involved in the current situation which is mass incarceration.

I'm saying, by virtue of being born, you should be fed, clothed, and sheltered because we can do that and the notion that we simply shouldn't so Mark Zuckerburg can have a fifth house is I'm sorry, a DISGUSTING idea to me.

> I would put this differently. I would say that the idea that someone could receive a basic living without producing anything that improves anyone's lives is offensive to huge numbers of people. And it should be.

Why is that offensive? With what we currently spend on defense, we could feed, house, and clothe every homeless person in the United States with Gucci bags, mansions and caviar. Why is it so important that we not? And if you cannot answer without citing tradition or work ethic or something equally arbitrary and archaic, then I'm sorry but I'm not convinced.


> After the limited time I've spent in my life paying attention to this, I'm not assuming any job, including my own, is safe from automation.

So you think things like artistic creativity, service work, craftsmanship, etc. are going to be automated soon? That there will literally be no productive things that humans can do, sometime in the not too distant future?

If that is indeed what you think, then I can see why you want some rule put in place that ensures that all humans get a basic living, uncoupled from work. But I still think that, if that's the case, humanity is doomed. See below.

> With what we currently spend on defense, we could feed, house, and clothe every homeless person in the United States with Gucci bags, mansions and caviar.

But that's not what you're talking about. You're not just talking about homeless people. You're talking about, eventually, all people. You're saying that there will come a time in the not too distant future where every single human on the planet has effectively zero productivity. And your way of preparing for this is to put a rule in place that says that humans don't have to produce anything in order to get a basic living.

One problem with this is, as I said before, change. If you haven't automated dealing with change, then any state where, for the moment, humans don't have to produce anything won't be stable.

But if you have automated dealing with change, then you're up against a bigger problem: you have basically invented AI, and there is no guarantee that the AI will care about humans. We will be at the mercy of the AI, just as other life forms on Earth today are at the mercy of humans. We will basically be zoo animals, preserved only at the sufferance of the AI. And in that situation, humanity is doomed.


You're making several deep errors regarding what I'm saying.

Firstly you're responding as though, at some mysterious date in the future, all people are getting fired and replaced with a robot. It's not going to happen that way, it's going to be a gradual process but I think not as gradual as a lot of people want to think, and I think once it begins it will accelerate exponentially as the technology matures.

Not to mention:

> So you think things like artistic creativity, service work, craftsmanship, etc. are going to be automated soon? That there will literally be no productive things that humans can do, sometime in the not too distant future?

You're still hung up on this idea that productive things are all people can do. The whole point as pointed out by another poster is that people were supposed to not work anymore, at least in the traditional sense: that humans would give the work to the robots, and then go find other, more enriching things to do, maybe something with art or just really learning a shitload about medieval poetry. The fact that someone chooses something that isn't necessarily productive doesn't matter in the world I'm envisioning, where scarcity is no longer a thing.

> But that's not what you're talking about. You're not just talking about homeless people. You're talking about, eventually, all people. You're saying that there will come a time in the not too distant future where every single human on the planet has effectively zero productivity. And your way of preparing for this is to put a rule in place that says that humans don't have to produce anything in order to get a basic living.

I wouldn't say it's going to hit zero. There will always be something for us to do, even if it's just to hit the stars and go find new things (ala Star Trek's utopian future).

What I am saying is: We already are seeing the beginnings of a population that can't really produce anything, and we're seeing a new phenomenon; we don't really need them to. How much of the population will end up like that isn't the point; the point is that some of them are, and some are already, and we have no mechanisms to deal with that other than starving people to death which I think is not a long term solution.

> But if you have automated dealing with change, then you're up against a bigger problem: you have basically invented AI, and there is no guarantee that the AI will care about humans. We will be at the mercy of the AI, just as other life forms on Earth today are at the mercy of humans. We will basically be zoo animals, preserved only at the sufferance of the AI. And in that situation, humanity is doomed.

This is a whole different discussion but this doomsday view also relies on the AI being entirely unaware of empathy, which as a core component of humanity, would likely make its way into the artificial minds humanity creates. It's a base function of animal and human brains, it's what stops us from killing each other over basic impulses.


> you're responding as though, at some mysterious date in the future, all people are getting fired and replaced with a robot

I have said no such thing. I am responding directly to your own statements. You said, in effect, that nobody's job is safe from automation. I just assumed you meant what you said.

> You're still hung up on this idea that productive things are all people can do.

All of the things in question are productive things, by the definition I thought we were using. A "productive" thing is a thing that improves people's lives. Are you saying that artistic creativity, service work, craftsmanship, etc. don't improve people's lives?

> There will always be something for us to do

That contradicts "no one's job is safe from automation", doesn't it?

> We already are seeing the beginnings of a population that can't really produce anything

Again, you're using a much too restrictive definition of "produce". But there's another point here as well.

The basic vision I see you describing is, nobody has to produce anything because all of the necessary production will be done by machines. But who owns the machines?

If the machines are owned by a few centralized entities, then we have the same problem of distribution that we had before--who gets the stuff the machines make? If you think there is any way of setting up a society that will guarantee that such a distribution is going to be fair to the people who don't own the machines, I have some beachfront property in Nebraska I'd like to sell you.

The obvious alternative is to make those machines cheap and small and plentiful enough that we can all have one. In other words, instead of universal basic income, we all are able to buy, at some reasonable price, machines that meet all of our basic needs. Then it will indeed be up to each individual person to decide what, if anything, they want to produce, because they will own all the resources necessary to meet their basic needs.

The difference between these two scenarios is that the first (yours) requires a fundamental change to human nature. I don't think that's going to happen. The second (mine) only requires a change in the kinds of technologies we try to build. That seems like a much better bet.

> this doomsday view also relies on the AI being entirely unaware of empathy, which as a core component of humanity, would likely make its way into the artificial minds humanity creates

This strikes me as overly optimistic handwaving. We have no idea how human brains implement empathy, and none of the artificial devices we have built so far have it. Yet somehow we're going to magically be able to build it into an AI?

> It's a base function of animal and human brains

Which evolved over hundreds of millions of years. I think you're vastly underestimating the amount of complexity that process created.


> The other thing that can happen with the surplus capacity available is that it gets wasted. People who find they don't need to work to make a living, do nothing that improves the lives of anyone, including their own. The best case of this is that they sit all day watching soap operas, or something like that. The worst case is that they start doing things that worsen the lives of everyone, like committing crimes.

Your prejudices are not facts.


I'm curious as to where this mass automation story originated. I haven't seen any real evidence that anything besides the most basic repetitive tasks will be automated in the future. This automation would also likely just lead to a new set of low pay, desirable jobs.

Sure, Moore's law and advancements in machine learning/vision push to make automation more economically viable for certain areas that were already good candidates. For other areas where human's adaptability is even moderately valuable, technology is a long ways away from coming anywhere close to beating out humans.

Technology breaking the chains of toil is a very idealistic thought. I can see technology augmenting more jobs and allowing humans to toil more efficiently, but not total automation.


Trucking, fast food, and retail could face huge amounts of automation in the next few decades, and thats a massive amount of low end jobs that could disappear. I think the idea of "fully automated luxury communism" is pretty silly, but there's almost definitely going to be substantial job losses, and I think we're approaching a limit where we don't have good low skill jobs to replace them.


I think the problem comes down to simple economic factors.

How much will it cost upfront to automate a specific area and how long will it take for such automation to turn a profit vs human alternatives.

Right now:

- the upfront costs are high

- continued maintenance and update costs are uncertain

- human are really not that expensive for what they can do

My view is that humans are actually a much more valuable resource than most HN/reddit/social media users seem to think. Solutions that fail to account for the __massive__ available decision making and processing power of the ~7 billion existing humans will just not be competitive. Someone will always find a way to harness the human resource and put people to work. I just hope the people get compensated fairly and the work won't be miserable.


I guess the question is what portion of the population is employed in these "most basic repetitive tasks", and with those automated, how many people getting paid are actually neccesary for capitalist production? If a lot fewer than the people who exist... what is to become of them? Some tech types say "Universal Basic Income" as an attempt at a solution to that.


Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?


Serious question: who says it "makes everyone better off"?

Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings).

>if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

Also, humans are not animals to just need food and shelter. For humans it's not just what you have, it's also what you have relative to others. That's why nobody in the US considers a "trailer park" person fortunate just because they don't live in a third world slum or in a cave like people did in 10.000 B.C. -- we consider their position relative to a current baseline. If that gets too out of balance, people have issues.


If you can't keep up, that's not other people's fault for being better than you.


>If you can't keep up, that's not other people's fault for being better than you.

Who said they were "better than [me]"?

You seem to presuppose what in fact needs proving: that if someone ended richer than someone else, they were better to begin with. Except if you mean "better at getting rich" which is a tautology.

Between inheritance and class status of parents, and between connections and lucky chances (including geography and color), there are so many ways to undeservingly be more wealthy than someone else and so many ways the "starting conditions" are not the same that this is not even wrong.

Now, two types of people usually have difficulty seeing this: those that played life in 'easy mode' (well off parents, good education, etc) and can't see how it's not as easy for everybody, and people who managed to overcome bad chances and who, due to confirmation bias, can't see that the chances for what they did were slim for others in the same boat but attribute it all to their hard work and smarts (and the lack of those in others).

http://thewireless.co.nz/articles/the-pencilsword-on-a-plate


> Now, two types of people usually have difficulty seeing this: those that played life in 'easy mode' (well off parents, good education, etc) and can't see how it's not as easy for everybody, and people who managed to overcome bad chances and who, due to confirmation bias, can't see that the chances for what they did were slim for others in the same boat but attribute it all to their hard work and smarts (and the lack of those in others).

* I dropped out of high school, got my GED

* Worked for a call center doing Verizon Wireless tech support, got customer service experience for my resume

* Worked for Support.com, got desktop support experience for my resume

* Worked on Taos' service desk, was there at the right time for a Salesforce.com Developer opening and was lucky enough that the people interviewing me decided to take a chance on me

* While working at Taos there was a co-worker in the NOC working on a little C# WinForms app that I helped out on occasion, he thought highly enough of me that he gave my information to a friend of his

* Said friend of my former co-worker decided to interview me, I've now been working at my current employer for three years and have been promoted twice

My abilities were a key component of my journey from a low-paying call center worker to a "Sr. DevOps Engineer" making twice the median household income in my area, but they wouldn't have mattered at all without a tremendous amount of luck.

If I hadn't decided to quit working at the call center to try and go to college I wouldn't have ended up working for Support.com, since I applied there over winter break as required by the state unemployment office.

If I hadn't started working at Support.com my resume may have been tossed in the bin when I applied at Taos due to having no documented desktop support experience.

If I hadn't started working at Taos when I did I wouldn't have networked with the people that led to my current employer, they got a government contract when I was leaving that required help desk personnel to get security clearance and I would have never applied in the first place. Not to mention they gave me an opportunity to prove myself as a high-school dropout with no degree, one which I probably only got because I was already an employee with positive references from others I interacted with.

I think it's easy for many people to underestimate where pure chance plays a part in their lives and careers, but I know I could have easily wound up doing menial low-paying customer service work forever without it. I merely had the means to take advantage of opportunities when they came up, but nobody gets anywhere without the opportunity to do so in the first place.


This is such an ignorant statement, it makes my blood boil.

People shouldn't be left to die, because they weren't naturally blessed with an adaptability that allows them to be retrained into software engineers. There are a huge number of reasons why someone might not be able to "keep up" in todays world. To write that off as 'being better' is disgusting.


The assumption which seems to underly this statement (that failing to keep up signifies some kind of personal inferiority) is fallacious. The fact of the matter is that around 40% of Americans end up in the same income quintile as their parents. Extreme moves in either direction are rare; 4% in the bottom quintile will move to the top and 8% in the top will fall to the bottom. So in fact a large part of someone's ability to "keep up" (e.g., not be poor) depends on whether they were born into wealth in the first place. No matter what level they're born at, most people don't move very far.

Source: https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...


Ok, let's say you're right.

1. Are you willing to leave behind, say, 40-50% of the population? Especially since that group could include people such as your parents or your partner or your kids.

2. If you're willing to leave them behind, what are you going to do with them?


If it's your parent, partner, or kids, (or even if it's not -- it could be anyone) you're welcome to provide for them yourself.

You're also welcome to donate to (or even work for!) charities that provide for them.

But it's not OK to force everyone else to provide for them.


Mark Blyth (prof. of political economy at Brown) has advice for anyone with this attitude: "The Hamptons is not a defensible position"[1]. What are you going to do when a large fraction of the population starts getting hungry and they decide taking what they need from you (and everyone else with wealth/resources)? Do you really think that the police will simply arrest them? What about when someone starts shooting and the protests turn into a mob burning down the city and the streets becoming a war zone?

Contrary to what other comments have suggested, welfare isn't about being a nice civilized society that doesn't leave people behind. Welfare is a bribe. It's a tribute ("danegeld"[2]) we pay to the poor so they don't burn down the city or murder anyone between them and food/shelter. Arresting that class of people would be more expensive as it still pays for their food and shelter.

Do you really want to give up the cheapest and safest option for defending yourself against the bottom ~quarter of the population? Recent events at Ferguson and Baltimor are warning. Ignoring them is not recommended if you value maintaining your current standard of living.

[1] https://www.youtube.com/watch?v=Zzl4B3mrKQE

[2] https://en.wikipedia.org/wiki/Danegeld

[3] Exact amount and the scope of what is mean by "national defense" is off topic.


It's both, actually. At the base level it is about protection, but at a higher level, if you've ever been in a society with a welfare state, things are so much nicer. People are calmer, more relaxed and even more polite (they might be colder or more distant due to cultural characteristics, though).

For me, personally, a random town in Germany is more pleasant from the social aspect than San Francisco with all its riches and its hobos.


That speaks more to police being incompetent, understaffed and/or underfunded (and to civilian concealed-weapons-permit-holders being too few and too-far-between) than to anything else.

(n.b. incarcerating a criminal costs tens of thousands of dollars per year; whereas the summary execution of a deadly threat during a riot, costs at most $10 of ammunition per criminal)


Ah yes, a competent police force is a death squad for the poor.

If you're going to advocate for murdering the poor why not go whole hog and just herd them into camps for eradication? That would presumably be a lot more efficient since you're centralizing everything


Not doable whatsoever, as that would actually constitute mass murder rather than self-defense of each officer. Lawful and moral use of deadly force against any individual requires that that specific person first present deadly force themselves.

So, to be clear, my overall point here is that bribing people from threatening deadly violence, is not as good as directly responding to such threats when and as they are made.

Come to think of it, I'm not even quite sure why you made the leap that "allow riots to occur then respond to them appropriately" means "murder all the poor people".


Interesting response, thanks. To parent's comment:

If >it's not OK to force everyone else to provide for them.

Along the same lines of thinking:

it's not OK to force everyone else to defend your assets/property/lifestyle

Or at least it's unlikely you will succeed in that effort


> it's not OK to force everyone else to defend your assets/property/lifestyle

No need for such a thing; that is the job we expect of the police in exchange for paying our taxes, is it not?


It is, this was a poorly thought out comment on my part, and after re reading it, it's a bad/illogical argument.


In the long term isn't it economically better to get people out of this welfare culture so they can provide for themselves? Gangs aren't formed to feed starving people, they form because the culture is broken. In the long term, placating gangs with welfare money will backfire. Arguably it's the welfare money that significantly led to the culture breakdown in the first place by destroying economic and social structure.


What "culture"? What "gangs"? I'm talking about the mobs that form when enough people lose basic necessities like food and shelter. When enough people have to choose between starving to death or joining the mob that's taking food by any means necessary, most choose the latter. Given the options, that's a rational choice. Nobody wants to be part of a mob starting a food riot, but that's what human s do when you they are out of options.

> they form because the culture is broken

Have you ever actually met many poor people? "Culture" isn't the problem, and they are some of the hardest working people in the country. They are also some of the nicest people I've ever met and by far the most generous.

If you want to actually fix the problem so welfare isn't necessary, fix the things that are currently denying them the opportunity to improving their situation such as the prison-industrial complex, racist crap like "redlining", various predatory business practices, and regressive taxes. Find ways to increase labor's power such as unions or guilds, with the goal of increasing both available jobs and job stability.

> Arguably it's the welfare money that significantly led to the culture breakdown

That is pure nonsense. Seriously, try actually living[1] below the poverty line for a while, or talk to people that have had to live through a lifetime of denied opportunities.

[1] Due to an unfortunate medical situation, I currently live on less than $1500/month.


The people rioting in Baltimore are gangs, not starving, hard working poor people you talk about. The hard working poor people are having their shops vandalized by the rioting gangs.


> Arguably it's the welfare money that significantly led to the culture breakdown in the first place by destroying economic and social structure.

A cursory examination of the level of violent crime (particularly against property holders) in states where there is little or no welfare state compared with those in which there is a pretty comprehensive welfare state would suggest this isn't a very good argument...


Can you link to this information? Americans came from extremely hard conditions, much harder than anyone today experiences and there was not the level of violence and crime we see today. Perhaps you can pay off the violent criminals in the short term but in the long term the criminals will cause social breakdown. People always want more, and if violence and the threat of violence is how they get more that is what they will continue to do.


>In the long term isn't it economically better to get people out of this welfare culture so they can provide for themselves? Gangs aren't formed to feed starving people, they form because the culture is broken.

Then it's the culture that needs fixing, not the welfare.

>Arguably it's the welfare money that significantly led to the culture breakdown in the first place by destroying economic and social structure.

Germany, Sweden, Switzerland, Denmark, et al. have excellent welfare, but no "gangs" of that style. So it's not the welfare that causes that phenomena.

In contrast, most developing world hellholes have little to no welfare, and huge gangs, violence and destroyed economic structures issues.

In fact the "have the community provide for itself" is how you get support structures like the mafia, the cartels, etc, substituting a state that doesn't help its people.


Welfare encourages a culture of dependency. Before welfare the social structure formed by religious and civic groups took care of charity and required more accountability and a change in mindset to go along with material aid.


Do you think these people don't have extensive private security? The elite could easily take on a whole city of rioters with the resources at their disposal. When the gloves come off and it starts being about survival it won't be bodyguards pushing people out of the way, it will be mercenaries with helicopters and full-auto weapons. The middle class that can't afford such protection will of course be the losers, as usual, and will be scapegoated after all the Richie Rich types have escaped to their private islands/bunkers.


You ought to familiarize yourself with the social contract. Rich people do not create their wealth in a vacuum. Everybody contributes to the creation of an environment whereby wealth creation is possible. This includes everything from basic utilities, infrastructure (roads & rail), health and safety, education, food security, military etc.

If you want to try your hand at creating wealth without "forcing" others to provide for you, there are plenty of lawless regions in places like Somalia, Syria, and Afghanistan for you to test your mettle. Sound unappealing? There you go.


Are you suggesting that rich people use those utilities like education or infrastructure for free? Because I'm pretty sure that they already pay for them, in taxes or otherwise. And of course their companies also PROVIDE some of the services you mentioned.


Are you suggesting that rich people use those utilities like education or infrastructure for free?

They don't start out rich. So, maybe some rich people inherit their wealth, but go back enough generations and everybody had to start non-rich.

It's not just that, though. Rich people don't live in a vacuum with their wealth. They interact with the economy. They employ people, they contract for services, they trade with people. All of the people they interact with need to be fed, clothed, educated, etc. However, thanks to the power of economic growth, they still get more out of society than they pay in taxes.


And here's my monthly reminder that places exist out there where you aren't 'forced' to help others (by some evil government): Somalia welcomes you any day now.

For some reason people are always reluctant to follow that advice.


Somalia's government situation is a mess because the country has no economically productive activity.

Not the other way around.


I disagree with you, but people shouldn't downvote you just because they don't like what you said.

In fact, it's important to remember that people do actually think what you wrote. They just don't say it aloud.


That statement should apply perhaps to companies, not people.


The severely disabled, we should provide zero social supports for them and their families so?

It's nobody's fault that they're garbage people. Luck of the lottery.


>The severely disabled, we should provide zero social supports for them and their families so?

If "we" want to provide support to any group, it can be done through charity. I'd argue this way is more moral: it's more of a good deed to be generous with one's own money than with other peoples', and it's not much of a good deed to give money if one's only doing so due to threat of imprisonment for failing to comply.

There's also research suggesting that charitable behaviour makes the givers happier too: http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf.


>If "we" want to provide support to any group, it can be done through charity.

Charity implies voluntarily providing support, leaving it to the benevolence (or lack thereof) of each individual. In the end, it teaches people that being uncharitable is OK and an acceptable trait, just like being charitable.

I want a society that mandates that support -- and even more so, one where everybody is OK with that.

In other words, instead of pushing out the disabled, in my society I'd rather push out (as useless scum) those that don't wont want society to help the disabled.

>I'd argue this way is more moral: it's more of a good deed to be generous with one's own money than with other peoples'

Then, since everybody will be using their own money to pay the "help the disabled" tax, it's a good deed to mandate by law that everybody has to fork out.

>it's not much of a good deed to give money if one's only doing so due to threat of imprisonment for failing to comply.

That would be irrelevant if the desired outcome is to effectively help the disabled, rather than to test honesty of people's charity.


>Charity implies voluntarily providing support, leaving it to the benevolence (or lack thereof) of each individual. In the end, it teaches people that being uncharitable is OK and an acceptable trait, just like being charitable.

Your use of "teaches" here implies that violence/imprisonment or the threat thereof teaches (if no mandatory charity teaches people that being uncharitable is okay, I assume you mean mandatory charity through taxation teaches people to be charitable?). That certainly isn't a given; how do you know whether people have been taught to be charitable by the threat of violence/imprisonment vs they're only paying taxes to avoid being imprisoned? If you beat a child for swearing, has the child learned that swearing is bad, or or has the child just learned to avoid swearing in front of the parent to avoid beating? I'd argue that one thing it definitely teaches is that violence is an acceptable means of making others do what you want, and to me a person who believes this is far more terrible than a person who's just too cheapskate to give charitably. Millions more people have been killed in the past century by people using violence to compel others and people supporting such ideas (e.g. Stalin, Mao, Hitler and their armies, even the politicians who forced people into the army via the draft) than have been killed from neglect (the 20th century war & genocide death toll far outstrips the death toll from starvation).

>Then, since everybody will be using their own money to pay the "help the disabled" tax, it's a good deed to mandate by law that everybody has to fork out.

Is a good deed a good deed if done unwillingly?

>That would be irrelevant if the desired outcome is to effectively help the disabled, rather than to test honesty of people's charity.

If people are free to donate as they choose and none chose to support the disabled, wouldn't that in fact show that society doesn't really care about helping the disabled anyway? In which case what's the justification for a law forcing something that few in society want? Conversely, given so many people do seem to care about the welfare of the disabled, why wouldn't they express this through charity?


>I assume you mean mandatory charity through taxation teaches people to be charitable?). That certainly isn't a given; how do you know whether people have been taught to be charitable by the threat of violence/imprisonment [so] they're only paying taxes to avoid being imprisoned?

It's not about knowing what each individual motives are though, it's about society setting X (we help the disabled) as a norm, rather as something that one may or may not decide to do.

In the end, some people might not like it, but more people will see it as a default/norm/baseline than in an opt-in society.

>Is a good deed a good deed if done unwillingly?

Yes, since again, the good is not in what it means for the one doing it, but in the good it does to the one receiving it.

>If people are free to donate as they choose and none chose to support the disabled, wouldn't that in fact show that society doesn't really care about helping the disabled anyway?

Yes, but there's nothing fatalistic about how a society "feels" (statistically) and what it cares about. Societies can be changed, and having helping as the default (and someone can always opt-in to help more), helps in establishing that kind of "help is good" change in my opinion.

>In which case what's the justification for a law forcing something that few in society want?

Well, what if few, including the black votes, (say, 10% of the 80% whites + 20% of blacks, so 70 vs 30) wanted the blacks to be free?

I would still justify such a law that goes again what the majority wants. Who gets to decide in general in such cases? That's a tricky question, but if it was up to my to decide, I'd decide in favor of that in that case.

>Conversely, given so many people do seem to care about the welfare of the disabled, why wouldn't they express this through charity?

Well, there's nothing stopping them to do so on top of state and structural assistance.


>In the end, some people might not like it, but more people will see it as a default/norm/baseline than in an opt-in society.

This is a supposition. I could suppose that (and I've certainly read this somewhere) actively giving to charity encourage people to give more; giving is like a skill, generosity is like a muscle, growing with practice. If giving is abstracted out to the state, if people think "I don't have to give to charity, my taxes give enough", people are deprived of that development. Who's supposition is more correct? I don't know, but it's not something that can be decided based on theory alone.

>Well, what if few, including the black votes, (say, 10% of the 80% whites + 20% of blacks, so 70 vs 30) wanted the blacks to be free?

>I would still justify such a law that goes again what the majority wants. Who gets to decide in general in such cases? That's a tricky question, but if it was up to my to decide, I'd decide in favor of that in that case.

The difference here is, if you have a society/governance structure that rejects the notion of using violence to enforce certain beliefs on others, there'd be no mechanism for keeping people in slavery. A society rejecting violence in the absolute sense would barely even support notions of property, yet alone slavery. The difference stems from the fact that neglect is a passive harm; if the person doing the neglect didn't exist, the neglectee wouldn't be in a better situation. If the man watching the downing man didn't exist, the drowning man isn't more likely to be saved. Violence is an active harm: if the person doing the violence didn't exist, the victim would be better off (at least from the victim's perspective); if the slaver didn't exist, the slave would be better off.

>Conversely, given so many people do seem to care about the welfare of the disabled, why wouldn't they express this through charity?

>Well, there's nothing stopping them to do so on top of state and structural assistance.

And people do give quite a lot. According to https://givingusa.org/giving-usa-2016/, Americans gave 373 billion in 2015. With a lower tax burden, people would have even more to give. https://media.nationalpriorities.org/uploads/discretionary_s... shows that in 2015, 54% of American government spending was military spending. Do you think if individuals had more choice over precisely how to spend that money, they'd put so much into the military?


>The difference here is, if you have a society/governance structure that rejects the notion of using violence to enforce certain beliefs on others, there'd be no mechanism for keeping people in slavery.

Slavery is based on using force to have others do your work, serve your interests -- not in enforcing certain beliefs in others. So it's not enough to have a "a society/governance structure that rejects the notion of using violence to enforce certain beliefs on others", but also to have a society that it or individuals also don't use force to serve their private interests.

While looks unlikely. How would such a society would enforce no slavery if people still profited from having slaves? It should punish those that do to prevent that (and thus it couldn't fully embrace the non-violence thing).

>(A society rejecting violence in the absolute sense would barely even support notions of property, yet alone slavery.*

Is such a society possible? Only if it has everybody's agreement (not to be violent, use violence when it suits them, etc). Else the society would have to use violence itself (that is, some kind of police) to maintain the non-violence in its members.

>The difference stems from the fact that neglect is a passive harm; if the person doing the neglect didn't exist, the neglectee wouldn't be in a better situation. If the man watching the downing man didn't exist, the drowning man isn't more likely to be saved. Violence is an active harm: if the person doing the violence didn't exist, the victim would be better off (at least from the victim's perspective); if the slaver didn't exist, the slave would be better off.

Well, if the "man watching the drowning man" was punished for his non-involvement, then future drowning men would be better off. So it might seem like it's a totally passive harm, but it actually affects the future of what's acceptable.

(Not to mention that the drowning man, assuming he eventually managed to escape, would probably rejoice in seeing the "man watching him" getting punished for not trying to help him).


>Slavery is based on using force to have others do your work, serve your interests -- not in enforcing certain beliefs in others. So it's not enough to have a "a society/governance structure that rejects the notion of using violence to enforce certain beliefs on others", but also to have a society that it or individuals also don't use force to serve their private interests.

>While looks unlikely. How would such a society would enforce no slavery if people still profited from having slaves? It should punish those that do to prevent that (and thus it couldn't fully embrace the non-violence thing).

I probably didn't make the best choice of words, but by "a society/governance structure that rejects the notion of using violence to enforce certain beliefs on others", I meant a society where violence is rejected in general; slavery is the slaver enforcing their beliefs on how the slave should behave on the slave, and they have to use violence for this, or else the slave would escape.

You're right though that maybe this would only work if every member in the society agreed not to use violence. There could be alternatives though, e.g. ostracising the violent person - if nobody else in society interacted with them, they'd starve. Or building a literal wall around the community and not letting the violent person in. Allowing people some degree of violence in direct self defence, e.g. restraining the violent person and pushing them out of the community.

>Well, if the "man watching the drowning man" was punished for his non-involvement, then future drowning men would be better off. So it might seem like it's a totally passive harm, but it actually affects the future of what's acceptable.

This only works if there's somebody who sees the person letting the drowning man drown (and if there's somebody else there, why didn't they save the drowning man themselves?). Even then there's no guarantee: maybe if such a law existed against not helping downing people, people who didn't like helping others would just stay away from rivers more, to reduce their chance of ever being in that situation in the first place.


> In other words, instead of pushing out the disabled, in my society I'd rather push out (as useless scum) those that don't wont want society to help the disabled.

Amen to that.

I was merely taking the original comment to one of its logical conclusion. Seems like there are those who would like to bring back charitable almshouses and asylums to replace state institutions, how quaint but also how despicable.

After all: If you can't keep up (even if you're disabled), that's not other people's fault for being better than you.


>If "we" want to provide support to any group, it can be done through charity.

It's funny. Propertiarians frequently use the argument against Socialism that it's "human nature" to be greedy, while simultaneously relegating social support to charity, supposedly out of the goodness of human hearts :)


It's worth noting that donating to charities usually includes tax benefits, since donations are tax-deductible. This provides a financial incentive for charity/philanthropy, thus exploiting human greed (or perhaps their disdain toward government taxation) for the betterment of humanity (at least in theory).


To answer that you need a way of equating money with "utility" (i.e. the use and/or pleasure that people get from their money).

I believe that utility is logarithmic with rate of expenditure. Hence doubling your spending rate gets you a constant increment in utility. This is why we measure pay rises in percent rather than absolute value. Another $100/week would make a huge difference to someone on the breadline, but is lost in the noise for a millionaire.

This means that money transferred from a rich person to a poor person will increase utility, because the decrement in the rich person's utility is more than outweighed by the incremenent in the poor person's utility. This difference can also accomodate the transaction costs (i.e. running the IRS) and the "deadweight cost" of decreasing the rich person's incentive to earn more.

This would seem to suggest that money should be redistributed so that everyone has the same amount, as that would maximise utility if the total amount of money is constant. But of course that condition isn't true: in a world with zero economic incentives there would be no economic activity. In reality of course such a world would go horribly wrong in any number of ways.

So there would seem to be an optimum amount of inequality in a society. Too little, and you destroy incentives to create new stuff, thereby making everyone poorer than they would have been. Too much and you are wasting valuable resources on gold plated baths that would be better spent giving poor people a tolerable standard of living, education, health care etc.


You're missing the commenter's point. If everyone ends up wealthier due to IT, then everybody's utility would be going up. Hence, IT would end up being a net positive thing even if it increased inequality.

In other words, if there were no way to reduce inequality without reversing the gains that everybody made, then reducing inequality in that situation would be harmful.


I suppose there is also a psychological component to it. If your neighbor is making 10x the amount of money and doing 1/10 the amount of work, then that's a real problem there. So even in relatively rich countries where everybody has enough food and medical care, inequality can be a problem.


My guess is it would be more of a logistic curve (S-shaped) rather than logarithmic. $1 does not make you much happier than 1¢, but $50k/year is a big step up from $30k/year.

At the low end, at some point you can afford to have a roof over your head, and an extra $20 might mean that you're eating much better for a whole week, or you can buy new shoes, or whatever. But if you're homeless, $20 won't feed you for very long or get you out of the rain for very long.

At the mid range, a salary bump from $30k to $50k might make a world of difference if you're trying to raise a family. It might mean that you're not worrying about how you're going to pay for groceries, or it might mean that your kids are always wearing reasonable, well-fitting clothing.


I think you are right that at very low levels, the same sum of money becomes much less useful, but I think you are wrong about the level at which that happens.

A few years ago, I met a beggar at a bus stop, who said that the store across the street had a sleeping bag for 50% off until the end of the week, and he was hoping that he would be able to buy it for the winter. I didn't have much money on me myself (basically just the bus fare), but I gave him what I had and walked home instead. To him, those five-ish euros meant not freezing in his sleep, while to me, they only meant a bit of unplanned exercise.

If you have nothing at all, every little bit of money gives you access to some tangible improvement of your situation. But if you have much less than nothing, and every cent of additional income just serves to lower a gigantic debt, there isn't really much incentive to earn more when it makes no significant difference in the end. This is probably one of the reasons bankruptcy law allows discharging unpayable debts, because otherwise debtors might not be motivated to do something about the debts they could repay.


At current exchange rates, $20 will provide 39 days worth of food to someone in the UK (assuming the only thing they care about it calories and not vitamins, as this is the Tesco Value Digestive Biscuits Diet — I have no idea if homeless people would eat like that).


Why do you think going from 0k -> 20k makes less of a difference than 30k -> 50k?(And we're talking about consumption not production, so weird things like having government benefits removed don't factor in).


I'm saying that $3 -> $5 is less of a difference than $30k -> $50k.


Increase in wealth inequality is not the only outcome. There's also the small issues of better resource management, like food per square acre, mpg, medical technology, etc. It's a complex subject insofar as it requires multi-discipline analysis. Is it reasonable that there be a stochastic "good/bad"? It's a good outcome for humanity, but has been tough to survive for the lowest IQ, least motivated, and least wealthy (relative to any given social locality) and tough to thrive/grow from the middle class. If you have a million dollars today, or had the equivalent in 1980, you could have lived off the interest and would have made money all the while till today.

Wealth inequality is often the basis for social revolution, so you have to be careful not to let it get too out of control for too long. In relation to dead cultures who went through this process, we've only just begun the initial stages of intolerance toward it. Occupy, bernie 2017, etc have largely been unsuccessful in motivating political or even social change. This was one outcome that was considered in the formation of the Union (an eventual defacto oligarchy) that was meant to be managed by the US political process. The conflict has already been escalated by flawed judgement in the judicial (citizens united).


The economy of a nation produces a certain amount of wealth, and that wealth needs to be distributed in a way that is as efficient and fair as possible (for some notion of fair).

Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy. There are false positives and false negatives there (people who make more money than their contribution is worth and vice versa), but that's the theory.

A fundamental assumption of that system is that almost everyone (apart from the sick or handicapped) can produce enough value to sustain themselves. Even if someone has no capital or no education, we assume that they can trade unskilled labor and that the value of that labor suffices to buy them, at least, the things they need to satisfy their most basic needs.

That assumption might become untrue in the future. If that happens, the problem won't be that we don't produce enough value to support these people, but that the current system for distributing that wealth will no longer work.


> Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy.

Where are you getting this from? I am aware of no such attempt. I thought that, in idealized capitalism, everyone gets as much as they are able to convince or legally force others to pay them, and 'value' produced is irrelevant.


Consider the question in a different context. Suppose I go to a poor village in India and I give each school age kid the equivalent of 10 USD in INR (rupees) but I give one kid the equivalent of 500 USD. Let's suppose the kid who gets more isn't chosen at random. Suppose that I have some criteria for who deserves to get more but that I don't consider who deserves it the most. Everyone got something but one person got significantly more. Is that a bad outcome? Will the kids who got 10 USD feel satisfied knowing that most of the others got the same amount? Will the kid who got 500 USD start to tell the others that they would have gotten 500 USD too if only they had done XYZ?

I think this question is really just asking if inequality is bad. It seems to me that inequality is an inherent part of nature in general and the human condition in particular. "Would you really want equality, or are you ok with inequality at some level?" Another way to say equal is homogeneous. To rephrase it, "Would you want everyone to be the same, or do you value diversity instead?"

I would propose a different question. If some cause (technology in this case) has the effect of helping everyone but helps some substantially more, is this situation sustainable? Then consider, will everyone's fortunes continue to improve forever? Will some equilibrium in the inequality be established? Will the inequality eventually reach an extreme such that the situation will be worse for certain people or society as a whole?

I don't propose answers to these questions. However, I think we can look through history to find examples of how similar scenarios played out in the past.


I think as long as the lowest people have a good standard of living, I would argue it doesn't matter that the richest have a lot more.


It could be bad if you find out that at some point, equality matters more than raw material wealth to the well-being of everyone.


Social mobility. If access to education and management positions are primarily a function of how much money your parents had then over time a ruling class with money but little clue will emerge. It will be all downhill for everyone from then...


On one dimension, health, there is a body of research suggesting that increasing income inequality is associated with poorer health outcomes at a population level. Here is a recent-ish review by two researchers who have spent a lot of time on this topic:

http://www.sciencedirect.com/science/article/pii/S0277953614...


How do you know if it's making "everyone" better off or not? What does 'better off' mean, and how do you measure it?

If you could demonstrate it made 'everyone' better off, I think it'd be an interesting question to consider. But I suspect many of those at the bottom ends of our actually existing inequality are not so "better off".


Some people will claim you can get both innovation and equality if you just throw in enough redistribution, but this is completely delusional.


Yeah only pinko hippies like the IMF believe that :)

https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf


You know IMF is not infallible? For example they were one of the architects of the Greek debt crisis. Even after the initial outbreak of Greek debt problem when it was clear to everybody Greece cannot ever repay their debt and it will have to be restructured, they recommended further and further bailouts in order to protect German / French banks, effectively bailing out big banks with EU taxpayer money.

Take a look at Greece today and see how IMF policies are working out. Actually you can take a look at the entire Southern Europe which is the end result of policies of IMF/ECB/Council, the so called Troika.


Perhaps the solution then is not redistribution of money, but common control over the means of production, the way by which people sustain themselves.


Communism is not a solution. It was tried in my home country with horrible results. It's been 25 years since end of communism and we are still recovering from the damage it has done to us.


For that reason I think we should support modern day Marxists (and non-Marxian Communists), anarchists and Communalists in their research and investigation into advancing their hypothesis. A good read on this is Badiou's The Communist Hypothesis.


Globalization is the cause of inequality. Technology just facilitates it. Capitalism leads to a concentration of wealth in the hands of a few and periods of globalization have resulted in high levels of inequality. Inequality today is comparable to the levels during the gilded age and there was no IT back in the 1870's.


Globalized capitalism has caused the largest reduction in poverty ever. If you had to be randomly born anywhere in the world, only getting to pick the date, you'd be smart to pick today if you wanted a decent shot at life.

Now, with regard to inequality in the US, that's mostly self inflicted. Moving production to cheaper areas lowers prices. It just so happens that the US chooses policies that increase inequality, rather than decrease it, like how education is funded.


>Globalized capitalism has caused the largest reduction in poverty ever.

This is a non-sequitur that often gets touted, despite totally ignoring efforts of NGO's, improvements in technology and industrialization, as well as decolonization. Further, the majority of the world's most developed economies, e.g. China, Japan, and the US, all relied on heavy protectionism to at first foster the creation of local industry. Forcing open the economies of developing nations is a surefire way to keep them poor and totally dependent on foreign imports.


Inequality is NOT a problem though. Poverty is a problem, but that is a different issue from inequality. Once you have the basics met (food, shelter) everything else is a luxury. A mud hut without enough to eat is not a life I would want to live, but I could live that way. Take away the hut or the food and I won't survive.

I like not having to cook over an open fire. I like having lights in the dark, a cell phone, a car, a washing machine, a table saw. Those are all luxuries and I want more of some of them.


Okay, except that in plenty of places being homeless is illegal, mud huts on property you don't own is illegal, you can expect your lifespan to be cut down by more than half, and the level of income inequality in the US is staggering. 95% of households make under $200k, while 3 million people make millions of dollars and do whatever they can to make sure nobody catches up to them. Even if you take poor people out of the mix, it's still a problem.


I understand that a true minimal lifestyle is illegal. However if we ignore that issue (I in fact do not agree with those laws) we can look at what our true minimums are.

A mud hut will not cut your lifespan. A mud hut of course implies that you don't have access to good medical care, don't have good heat, and cooking on a smokey wood fire. All of those will cut your lifespan, but it isn't the mud hut it is the rest of what it implies. In short poverty which I already said is a problem.

We can move up a step: at $5/hour (less than minimum wage in the US, but lets call the rest lost to taxes) you can potentially earn $800/month, put $600 into rent in a cheap apartment and that leaves $200 for food. You will be walking everywhere, getting clothing at goodwill, but it is enough to live to a fairly old age one (once you get old you can no longer afford your medical bills, but most people can live to old age with minimal medical care)


$200 is left for food and medical and clothing, and won't buy you a very healthy diet, at least where I am, which is considered a cheaper place to live. Also that's ignoring, the systematic barriers in the way of doing that. In a place where you don't need a car to get from cheap apartments to work, "cheap apartments" cost more than $600. In a place where apartents are actually cheap enough, and someone walks say a mile every day to work, they're competing with everyone else to find work in a small radius. That's a tiny tip of the iceberg, but in a perfect world minimum wage would be enough to live on for everyone everywhere. We don't live anywhere near there


They had telegraph systems.


Noah Chomsky says technology is neutral: it can be used to empower companies, automate jobs away (as it's the case right now). It also could be used to empower employees (into super craftsmen??) but so far this direction isn't pursued.


Technology might be neutral, but capitalism is directing it.

(Nothing against capitalism. I just think the general direction will be profit maximisation.)


policy & regulation within capitalism determine whether corporations can be commoditised by customers (a lot of market competition) or labour can be commoditised by corporations (monopolies & job scarcity, collusion)


That appears to be the case here:

https://qz.com/962427/what-its-like-to-be-a-modern-engraver-...

If you think about it, wouldn't more advanced technology lead to higher consumption until everybody has literally everything that they could possibly want?

Technology is more of a scapegoat for rising inequality than a proximate cause.


Not to undermine the increasing inequalities between employees and employers in many aspects, but there is a strong increase in work-at-home thanks to telecommuting and there is an increase in self-employed people thanks to ease of access of new technologies.


Makerspaces are sort-of empowering supercraftspeople.


I don't know. Anyone who I'd consider a supercraftsperson usually has their own shop & tools. Most of the stuff coming out of maker spaces are trinkets. You won't find there the old man who builds 1/10 models of steam locomotives.


The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment. --Warren Bennis

Bu imagine an alternative world without factories. The maker movement is still ahead of us. Imagine there exists an open-hape-wiki with 3d-models of every part of every thing we ever built (actually these models exist already but are not open source).

The shop & tools are would be a 3d-printer plus remote controlled robot arms (so that a person from Ukraine can deliver service to you).


Sure, but why is the person from Ukraine in the loop?

Don't get me started on 3D printing (I have one). It has its uses, and more so (with all the hype) it doesn't have its uses.


The person from Ukraine is in the loop anyway, except currently they are employed by BigCo1 at $1/day and still BigCo1 charges you $100/h for services taking all the arbitrage profits.

The goal is to dis-intermediate, to enable person to person (customer & supplier) to profit from the living cos / efficiency arbitrage.


This is a very long, very technical article. I really won't understand much of it as it is now. And that's a pity because this is a question that needs to be understood and debated.

I think that unless there is a digestible version of the arguments along with the general counter arguments, it's not a very useful read. And comments are just going to be undocumented reaction to the title...


The rise in inequality also corresponds to the availability of "cheap" personal credit.

The availability of credit also corresponds to a decreased rate of rise in wages.

It's almost like the two are linked. Stop paying people more and give them loans instead.


That's exactly what happened. To keep the system working given both rising inequality and rising productivity, the money was loaned to workers instead of provided as salary; see Richard Wolff: http://www.mediaed.org/transcripts/Capitalism-Hits-the-Fan-T...


This article shows that IT has emerged as an important new industry, but it doesn't really convince me that it is the primary cause of inequality.

One of my favorite surveys of income inequality is a Krugman essay from 15 years ago (before he went full political). http://www.pkarchive.org/economy/ForRicher.html

He briefly covers globalization, technology, and returns to scale for celebrities, but ultimately argues that changing social norms and the resulting drop in taxes from 1980 onward explains most of the dramatic rise in income inequality.


I don't think it makes much of a difference whether it's IT or any other segment of economy that generates the most increase in inequality. Creating and/or maintaining some level of equality is always an uphill battle on ever changing ground and there are enough “capitalism hackers” who know how to leverage “the system”, the market, influence, etc to make that battle harder.


industrial revolution, IT, next is AI (in all shapes, from self-driving to self-kidney-transplanting to self-QM and space-exploring) ... and that is the emotional foundation of that scene from the "AI". Though cyborg-ization of people may open other options. May be it will be natural that "all cyborgs are equal" as a result of being connected to the same global AI net, etc... Though most probably the cyborgization would be subject to heavy market segmentation too.

Also, it seems that the short period of lesser "income and wealth inequality" in US (all the other places were just poor, thus there was natural "equality") during around 195x was just a temporary aberration. Not that it wouldn't be good to repeat it, mind you.


Are you implying that all countries except the US were poor in the 1950s? While the US was at the head of the per-capita GDP ranking in 1950, there were others that followed close: http://www.nationmaster.com/country-info/stats/Economy/GDP-p...

Notably Venezuela was 4th, which seems especially sad given the recent developments there.


Yeah, I was kind of afraid to say this, but software is getting really efficient at so many things, so free markets just decided to reward software.

Just like everything, once there is an evolution, if you're out of it, you're obsolete and you matter less.

Just made me think about this article where those few indispensable engineers that get a high pay.

In a capitalist environment, technological improvement goes fast (although technology was also developed under soviet russia), and the reward gets very concentrated. Property means that innovation is not really shared, only sold.

One could endlessly talk about how IT seeds from the internet technologies being developed from DARPA and made public. Hard to say if markets really improved what DARPA developed, IMHO I'd say no.


Throughout my career 90% of my work's aim was to directly or indirectly eliminate jobs. That pushes pressure on labour and lowers / stagnates wages.

Corporations rarely use tech to fight other Corpos. When they do the best strategy is to commoditize competitor's main market [1].

Ex1. free Google maps have killed many GIS / mapping businesses.

Ex2. Free Google Docs hurts badly MS Office (office is 33% of their revenue)

[1] Smart companies try to commoditize their products’ complements. https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/


There is a huge gap between the real and financial sector regarding the value added that goes from 70tis on.

https://tcf.org/content/commentary/graph-how-the-financial-s...


Guns don't kill people. People kill people.


Why is income inequality bad anyway?


Generally speaking, income inequality leads to social instability. In the limit, that means violent revolution.


That problem will be fixed once we get robot soldiers.


I'd rather say that high income inequality leads to people realising class antagonism between the proletariat and the bourgeoisie, and the synthesis of this conflict is Socialism.


Violent revolution is manifested throughout human history, before there was even a concept of Socialism. They were called "slave rebellions."

https://en.wikipedia.org/wiki/Slave_rebellion


This is the point - it is class conflict, Marx took this into account in his materialist conception of history. The antagonism of proletarians and bourgeoisie is the modern manifestation of the class war; slave rebellions the ancient manifestation.


Infuriating!

An high-priest of the church of the economists does his job of exonerating politics from ugly social change, with "IT" as the sacrificial goat.

The obvious counterpunch "what about politics" gets this answer doubling down slimy-leech style:

(Quote)

A Final Note The IT revolution has brought about improvements in living standards and its great technical achievements enjoy a very high level of consumer and political support. However, these sources of social benefits are also the cause of social losses and rising inequality that threatens the foudation of our democrastic socieity. Th uniqueness of this study is that it focuses on the effect of technological change on efficiency and distribution and although we show modern developments in IT enabled higher barriers to entry, rising market concentration and increasing monopoly power of firms, we have avoided a policy evaluation. Yet, although these developments enjoy substantial public popularity it is only a matter of time before we shall need to debate the appropriate public policy to response to the social changes we face. To illustrate the need for some urgency consider the exmple of social networks. These are, in fact, privately owned public utilities. Subversive and terrorist groups have used the internet and social networks for coordinating their activities and these social networks have been a key tool for spreading rumors and conspiracy theories or, more generally, for proliferation of "fake news." These are national security problems and are challenges to the proper functioning of an informative press in a Democracy. The question we face is who should make the decisions on how to respond to these problems? Today it is entirely up to the private firms who own these channels to formulate good public policy decisions. This is not likely to remain a satisfactory solution. (End of quote) What about salaries and negotiation powers, financialisation and asset-prices inflation?


Would you please not post ideological rants to HN? Even if you're right, it lowers the quality of discussion below what we're hoping for here. Actually being right makes it worse.


Hey its not our fault our line of work provides a highly valuable service of which few people enter.




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